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What is a Multi-Carrier Parcel Management Solution?

The term “multi-carrier parcel management solution” has become more widespread as companies digitize their supply chains to successfully execute an omnichannel order fulfillment strategy and ship parcels competitively.  But what is a multi-carrier parcel management solution?

According to Gartner:

“Multicarrier parcel management solutions help companies select the appropriate (best) parcel carrier from among all contracted carriers. This selection is based on order characteristics (such as weight and dimensional properties), delivery rules (such as delivery time and delivery zone) and carrier performance, while considering the cost differentials of various carrier offerings. These tools also enable shippers to manage the creation of labels, create shipper manifests, provide status messages to customers or customer service representatives, and manage carrier rates.”

In addition, multi-carrier parcel management solutions often integrate with a company’s ERP system and/or a warehouse management system (WMS) to create a single, efficient, supply chain ecosystem. Orders flow seamlessly between the technologies in the ecosystem, creating organizational alignment, decreasing the time from order to delivery, and yielding benefits such as:

  • Decreased transportation spend and increased profits per parcel
  • Time savings
  • Improved customer satisfaction
  • Informed decision-making
  • Simplified collaboration with supply chain stakeholders
  • Cost-effective operational scale

Choosing the Right Multi-Carrier Parcel Management Solution

ebook logistyx quadrant Choosing a TMS for Parcel ShippingEvery shippers’ parcel shipping operations are unique.  And the truth is, so too are the multi-carrier parcel management solutions on the market.  Some offer basic rating, rate shopping, and labeling, while others offer more advanced functionality such as returns management and Business Intelligence. To reap the benefits listed above and quickly generate an ROI, it’s important to choose the solution that’s the best fit for your business.  The first step is to understand the direct impact of each feature within the technology and then determine whether it can improve your specific shipping environment.

According to Gartner, most multi-carrier parcel management solutions offer basic features that unlock potential for improved operational efficiencies and increased visibility throughout the supply chain.  These may include:

  • Parcel Contract Management
  • Carrier Compliance
  • Parcel Consolidation
  • Label and Document Creation
  • Parcel Execution
  • Real-Time Parcel Visibility
  • Reporting/Analytics

While a shipper’s top priorities are usually cost optimization and the ability to work within a large carrier services network, capabilities outside of the basics listed above can enhance the entire shipping process, deliver better customer service, and utilize data more effectively. These advanced features may include:

  • Parcel Optimization
  • Procurement and Bid Optimization
  • Automated Rate Shopping
  • Parcel Freight Payment
  • Mobile Solutions
  • Last-Mile Delivery
  • Returns and Claims Management

With so many features and functionality available in multi-carrier parcel management solutions, even the most seasoned industry expert can become confused when looking to implement a new solution.  Our best advice is to remember the right solution for your business will be the one that expands and contracts with your business, so you always have the features you need to execute your order fulfillment strategy.

The Difference Between a Cloud and an On-Premise Multi-Carrier Parcel Management Solution

Multi-carrier parcel management solutions can be installed and accessed in different ways. The traditional way, and the one used by many early adopters of transportation technology, was on-premise.

An on-premise multi-carrier parcel management solution delivery model is exactly that – the solution is hosted on your premises (aka your servers). This means the system is reliant on your network and your IT resources. While this can mean faster LAN speed and file access, it also means you need the right infrastructure in place to manage your system’s security, maintenance, IT, upgrades, and support.  Many companies find that as they scale (think e-commerce), they quickly become underwater.

In contrast, a cloud multi-carrier parcel management solution is accessible to users via the internet and is managed by a third-party vendor. Rather than installing and hosting the software locally on your servers, you basically “lease” it on a fee basis.

Gaining in popularity, a cloud delivery model improves scalability, accessibility, and security – seamlessly connecting people, processes, and third parties to your parcel shipping operations in real time, regardless of location and with minimal upfront costs and IT investment. All users can execute, track, and analyze parcel shipping in a single solution – improving reaction time, collaboration, and decision-making accuracy.

And since the solution provider hosts and maintains the cloud multi-carrier parcel management solution, the software doesn’t monopolize space on your servers or consume your IT resources. The solution provider is responsible for all upgrades, repairs, and support, which means the solution deploys faster and enables you to realize a return on investment quickly — without the hit of an initial investment and with the benefit of accelerated implementation and integration processes.

Also important to note: an additional benefit of a cloud model is security. A reputable cloud multi-carrier parcel management solution will potentially provide more robust data security than you could yourself – particularly if you lack deep IT resources, staff, controls, or expertise.

How Can a Multi-Carrier Parcel Management Solution Decrease Transportation Spend?

Whether your parcel shipments are crossing borders or arriving next day, a multi-carrier parcel management solution lowers shipping costs by:

  • Comparing Carrier Rates:Multi-carrier parcel management solutions enable shippers to automatically access all of their negotiated carrier rates in one system, choosing the optimal rate for each shipment according to the shipper’s business rules and ensuring every shipment is in compliance with each carrier’s labeling and communication standards, as well as with any applicable trade regulations.
  • Paying Carrier Invoices Correctly:Carrier invoice auditing is another way to save on total transportation spend.  For shippers shipping large parcel volumes, auditing carrier invoices is crucial. Mistakes can, and do, happen. For example, a carrier may bill for a service level promised, but not received, or a carrier may add an unexpected accessorial. These errors can add up quickly and can have a surprising impact on the bottom line.By leveraging a multi-carrier parcel management solution, shippers can automate carrier invoice auditing.  All transportation data, from carrier contracts… to delivery events… to carrier invoices, is captured and normalized in the multi-carrier parcel management solution, which then flags any discrepancies between expected costs and carrier invoices – giving shippers greater control over their transportation spend.And the savings don’t stop there.  In addition to the direct cost savings carrier invoice auditing achieves, shippers also benefit from “soft cost” savings by eliminating resource intensive tasks such as opening mail, sorting invoices, verifying rates, auditing and approving invoices, paying carriers, and performing cost accounting.  By removing these soft costs, accounting teams can focus their efforts on more strategic initiatives.Furthermore, carrier invoice auditing provides shippers with an overview of invoiced carrier costs versus carrier agreements, enabling them to ensure their carrier procurement is aligned with strategy and to verify they’re receiving the delivery outcomes for which they’ve paid.  A sophisticated multi-carrier parcel management solution will model and compare selected carrier services against actual carrier performance to find routing alternatives with lower cost implications and/or faster delivery times. The solution can also reveal even more advanced optimization strategies, such as effective ways to position facilities and inventory around the globe.
  • Improving Visibility:Shippers leveraging a multi-carrier parcel management solution improve visibility into their supply chain operations.  All stakeholders use a single platform to see delivery status updates, receive alerts to delivery events, and make real-time adjustments to keep the supply chain running smoothly and customers happy.  For example, in the event of a delivery disruption, the shipper can take steps to send the product from a different distribution center to arrive on time. Or the shipper can communicate with the customer: is he or she willing to retrieve the product from a nearby store or locker to receive the product on time? Customers can even track and trace shipments on company websites without the need to visit carrier sites, reducing inbound calls about shipment status to customer service and increasing the customers’ browsing behavior on the shipper’s website – which (fingers crossed!) could lead to additional purchases. Consider too that tracking delivery exception events enables shippers to capture accurate carrier performance data – improving carrier service measurement and better informing carrier contract negotiations.

Capitalize on Supply Chain Opportunities

Multi-carrier parcel management solutions like Logistyx TME help companies capitalize on supply chain opportunities by increasing end-to-end supply chain visibility, controlling transportation spend, and leveraging analytics to optimize order fulfillment strategies.  And since Logistyx TME is built on the latest cloud technology, it can be implemented quickly to yield a rapid ROI.

Contact one of our experts to learn more about Logistyx TME today.